Healthcare Realty Trust Announces Formation of Joint Venture With TIAA

Rhea-AI Summary

Healthcare Realty Trust (NYSE:HR) has announced a joint venture with Teachers Insurance and Annuity Association (TIAA) to invest in medical office buildings, enhancing its investment volume and earnings growth potential. The company holds a 50% interest in the venture, aiming to purchase around $200 million in properties annually without significant property-level debt. The first property acquired was a $16.6 million building in Minneapolis at a 5.1% cap rate. As of September 30, 2020, Healthcare Realty managed properties valued at approximately $5.5 billion.

Positive

• Joint venture with TIAA diversifies funding sources and enhances investment volume.
• 50% interest in the joint venture allows for strategic growth in medical office building investments.
• Initial property acquisition at $16.6 million reflects sound investment strategy with a 5.1% cap rate.

Negative

• None.

NASHVILLE, Tenn., Nov. 16, 2020 (GLOBE NEWSWIRE) -- Healthcare Realty Trust Incorporated (NYSE:HR) today announced that it has entered into a joint venture agreement with Teachers Insurance and Annuity Association (“TIAA”) to invest in a broad range of medical office buildings. The joint venture strengthens the Company’s efforts to sustain higher investment volume and earnings growth regardless of market volatility by further diversifying its funding sources. The Company is the managing member of the partnership and manages day-to-day operations and leasing of the properties in the joint venture. Healthcare Realty owns a 50% interest in the joint venture and will fund its pro-rata share of future investments. The joint venture expects to purchase approximately $200 million of properties annually and does not contemplate using property level debt in most instances.

On November 12^th, the joint venture purchased its first property for $16.6 million at a 5.1% cap rate. The 92,139 square foot building is located on Allina Healthcare’s Mercy campus in Minneapolis. The joint venture will seek to realize additional value through the lease up of the 80% occupied building. Property level debt was not associated with this initial acquisition.

The Company intends to provide additional disclosure in its future quarterly supplemental materials regarding properties owned by the joint venture. BlackBirch Capital served as advisor to Healthcare Realty on this transaction.

Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of September 30, 2020, the Company owned 211 real estate properties in 24 states totaling 15.5 million square feet and was valued at approximately $5.5 billion. The Company provided leasing and property management services to 11.9 million square feet nationwide.

In addition to the historical information contained within, the matters discussed in this press release may contain forward-looking statements that involve risks and uncertainties. These risks are discussed in filings with the Securities and Exchange Commission by Healthcare Realty Trust, including its Annual Report on Form 10-K for the year ended December 31, 2019 under the heading “Risk Factors,” and in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020, and September 30, 2020 and other risks described from time to time thereafter in the Company’s SEC filings. Forward-looking statements represent the Company’s judgment as of the date of this release. The Company disclaims any obligation to update forward-looking statements.

Carla Baca
Associate Vice President, Investor Relations
P: 615.269.8175

FAQ

What is the joint venture between Healthcare Realty Trust and TIAA?

Healthcare Realty Trust has entered a joint venture with TIAA to invest in medical office buildings, aiming for $200 million in annual acquisitions.

How much did Healthcare Realty Trust invest in its first property acquisition?

The initial property acquired by the joint venture was for $16.6 million.

What is the cap rate for the property purchased by the joint venture?

The cap rate for the purchased property is 5.1%.

How much real estate does Healthcare Realty Trust manage?

As of September 30, 2020, Healthcare Realty Trust owned 211 properties totaling 15.5 million square feet.

What is the value of the properties managed by Healthcare Realty Trust?

The total value of the properties managed by Healthcare Realty Trust is approximately $5.5 billion.